Super saver's guide to retirement

In this post you will learn :

  • How to maximize your retirement savings
  • How to contribute $111,500 per year in your retirement account per year.
  • How to contribute up to $35,500 in your Roth-IRA per year.
  • What are the best strategies for contributing to retirement
    • How to roll-over your after-tax 401k into Roth IRA
    • How to contribute to solo-401k

We saw in a previous post how to maximize contribution to your retirement account.

Here I decided to create a infographic (since images are worth a thousand words).

Here are a few strategies to maximize your saving, is to use

  • Maximize your Solo-401k contributions
  • Use your After-Tax contributions and roll over to Roth IRA.
  • Use a Roth-401k (instead of traditional 401k)

Maximize your Solo-401k contributions

To have a solo-401k, you need a to be a business owner. If you are not, then do it NOW! Being a business owner is key to freedom and the goal of this blog is to help you reach it.

Once you have business income, you are entitled to save up to 53000$ per year in your solo-401k.

Rollover your After-Tax 401k contributions to Roth IRA.

Can I rollover my after tax 401k contributions to Roth IRA? The answer is yes you can.
But you need your employer to give you the option to contribute to an after-401k.

Using a Roth 401k instead of traditional 401k.

If you want to save more, you can use the strategy of paying your taxes now (instead of later) with the Roth 401k. Effectively, since the contribution limit is the same, you will end up contributing more (since after-tax is equivalent to ~25-40% more than pre-tax money to account for your taxes, depending your tax bracket).

Getting over the Roth-IRA contribution limit

Today's income limit for Roth-IRA contribution is 117k$ for single and 184k$ for married. However, with the strategy explained about (Rollover your after-tax 401k contributions), you are able to contribute to your Roth-IRA even if you're above the contribution limit.

Tell me what you think. Do you think it is a good idea to be an aggressive saver?

How much are you planning to contribute this year?

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